What looks like the biggest patent sale ever could well be a damp squib
25Nov12

One of the biggest patent divestments in history got underway last week with the news that 7,500 patents and applications held by Qimonda AG have been put up for sale as part of the company’s on-going bankruptcy proceedings. According to the press release announcing the move: “The IP rights relate to inventions that are relevant for the semiconductor, computer and communications industry.” The release then goes on to quote the man running the insolvency process:

“The patent portfolio is the result of decades of outstanding world-class R&D work,” explains Qimonda insolvency administrator Dr. Michael Jaffé. “Given the increasing importance of patents for the competition in the global high-tech industry the Qimonda-portfolio provides a unique opportunity for the purchaser to significantly improve its level of protection.”

Anyone hoping for any further information, however, is going to be disappointed. I contacted the PR representatives of JAFFÉ Rechtsanwälte Insolvenzverwalter, Dr Jaffé's firm, to ask about the geographical scope of the portfolio and the sales process, but was told: “All that we can say for the moment is in the press release. The patent portfolio has a global reach therefore it’s hard to give numbers for a geographical break down. The sales process will be a bidding process, in which also certain sub-portfolios, defined by the seller, may be sold independently.”

That leaves open many unanswered questions. For example, you would expect that a portfolio principally consisting of US patents would be worth a lot more than one that is mainly made up of one covering other jurisdictions. But that, of course, would also depend on encumbrances. As Qimonda has run a licensing business since 2009, it could well be that many companies are already covered by agreements and so would not necessarily feel that exposed by the portfolio falling into the hands of a rival or an NPE. It would be interesting to know whether JAFFE has worked with any outside advisers on sale structure and portfolio analysis. But, if they have, they are not telling us.

What we can say with some certainty, though, is that this sale involves a bigger portfolio than the Nortel, AOL and Kodak sales. Indeed, it could well be the biggest there has ever been. However, whether it comes close to raising the sums generated by AOL, let alone Nortel, is very much open to question.